Pages

07 August 2017

Muskrat, risk, and memory #nlpoli

There's a great column in Saturday's Telegram by Pam Frampton that anyone concerned about Muskrat Falls should read. It's the latest in a string of columns that Pam's been writing about the troubled megadebt project and events in 2013 around the time that the major contractor on the project produced a memorandum about huge risks that needed attention.

In the very first sentence, Pam mentions a book she's apparently just been reading. It's called Megaprojects and risk. It's written by three Scandinavian scientists who studied huge construction projects to try and find out why they tend to go wildly over-budget. They found that the folks behind gigantic projects over-estimate the benefits and underestimate the costs.

Note the date of Pam's column.

2017.
Regular readers of these e-scribbles have known about this book since 2005. That's when SRBP mentioned it in a post about another lunatic project, namely the plan to dig a hole from the island to Labrador and connect with a road along the north shore of the St. Lawrence that doesn't exist.

Megaprojects and risk has turned up a number of times around these parts - 2011 again in 2011 - since so much of the book is directly applicable to the mess at Muskrat and how we wound up struggling to keep our nostrils above the quagmire.

It's not like we didn't know about all the problems with the project before now. In general, we've known from the start about the megaprojects risk thing because the issue is well-known globally. In fact, the problems with megaprojects and decision-making are so well known that in the summer of 2012, SRBP did a batch of posts about the well known fallacies that often drive decisions about big projects.

As far as the general issues with megaprojects, we've had the risk book, plus, All of the issues specific to Muskrat Falls that people are currently up in arms over - environment, cost, consumer electricity prices - have all been well documented since long before the project even started, too. A post called "Going down by the front end" even delved into the whole decision-gate process and touched on the kind of arrogance in Nalcor senior management that led them to completely dismiss advice from one of their consultants about cost over-runs. Don't need to put any cash aside, Nalcor said in so many words, because we have already prevented any from happening.

They said this at Decision Gate 2, that is, in the fall of 2010 when Danny Williams announced the project. That's the actual project sanction gate by the way. The DG 3 one two years later is a sham. Everyone uses it because Nalcor claimed that was when the government finally gave the green light. Only a fool would believe such a thing after 2010 and only a bigger fool would keep benchmarking the project in December 2012. The facts and evidence affirm the de facto starting date: DG 2 November 2010.

The point here is not "told ya" but rather than the information about all the real and potential risks of Muskrat Falls were in the public domain regardless of what happened at SRBP. Even if the blog never existed, some reasonably smart bunny at a local newsroom or in a political party could have and should have dug it out and used any of that information. Politicians, reporters, editors and publishers, academics and other community opinion leaders had a moral obligation to question the project. And that's on top of their professional duty and personal interest in making sure that this thing made sense.

There point here is that despite all of the incontrovertible evidence, all those people didn't dig and they didn't look and they damn well did not say that the whole project was out of control and ought to be stopped.

No.

Most of the people ignored the serious issues. The ones who didn't ignore them raised only the most mild of objections and then only asked about the process not the substance.

For example, people would have you believe these days that Lorraine Michael and the NDP spoke against the project from the start. They did not. In 2010, they backed the project because there was an NDP government in Nova Scotia due to get freebies thanks to people in this province. The strongest warning Lorraine made in 2012 was that maybe we should be careful we didn't make a mistake like in 2008 with Abitibi. She didn't question the principles of the project or even any of the facts. Even as recently as 2015, the NDP ran an election campaign on the pledge to give the project more oversight, nothing more

The facts are one thing. What people claim is another and in this instance, the facts are decidedly against the windy fairy tales coming from the political left.

Ditto the utterly insane claims by the Premier that he opposed the project. He never has. Indeed, as we've noted here before, Dwight Ball claims he had doubts about Muskrat from the beginning. The truth is that Premier Dwight Ball enthusiastically told the world in December 2012 that he "could always support the principles of [Muskrat Falls]."

His words at the time are important, especially now that he says he had doubts from the beginning or never supported it. "I can remember in November, 2010," Ball told the House of Assembly in December 2012, "being in Central Newfoundland and there was a media release that came out and said there was going to be an announcement on the development of the Lower Churchill. I pulled over and listened intently to the media release and the discussion about the term sheet."

"I will say I was quite happy to hear what I was hearing. Like many of us, we grew up looking for and wanting to see the Lower Churchill developed. As we have heard so many people talk about the ghosts of the Upper Churchill, we wanted those out of our lives and we wanted to see the Lower Churchill with the effect it would have."

"Through all of that, after the election last October, 2011, I will say that MuskratFalls pretty much dominated my life. I was not satisfied just to listen to what I had been told. I read as much as I could. On July 31, 2012 when the formal agreements were officially signed, all thirteen of them, over 1,500 pages, and many definitions, I read every single formal agreement and every single piece of paper related to those formal agreements. I read them all. I wanted to get an understanding of what impact this particular project would have on the future."

"I know within the last year or so I have asked a number of questions in this House. I can assure you the principles of the development of Lower Churchill are always something I could support. The economic benefits that the development could create I think is a good thing. The opportunities we will have in Labrador as a result of this will be a good thing. Closing down Holyrood, as I said earlier tonight, will be a good thing. The fact that we have taken a different corridor around Quebec will be a good thing. That is the message they need to hear and it gives confidence to the people here in the Province. We need that."

The point to recall here, though, is that Ball was not alone in 2010 or 2012 nor is he alone now in making up an entirely fictitious version of himself in the past. Most of the people of the province who now oppose the project supported Muskrat Falls in 2010 and 2012. The reasons they all gave were the same as the ones Dwight Ball used. A few of them, like the idea that Quebec was blocking export, were complete false. What's worse, people knew some of the claims - like the Quebec thing - were false at the time they said them.

The definition of a lie is saying something you know is not true. Think about that. Think hard about that.

And among the things that weren't already identified as false were things that were doubtful at the very best. The joint federal-provincial panel had ripped the guts out of claims about demand, for example. In the claim about lowest cost alternative, no one bothered to notice that Nalcor never, ever released to the public a single example that showed they had systematically examined alternatives to Muskrat Falls to meet domestic electricity supplies.

They still haven't.

You cannot produce things that never existed.

None of these people were or are stupid. Ball and the politicians in the House in 2010 or 2012, the reporters who either swallowed the Nalcor bumpf or who - even worse - were enthusiastic cheerleaders for the Premier, party, and people who brought us Muskrat Falls. Even the folks at the Board of Trade who voted against free enterprise when they endorsed Muskrat Falls.

No dummies there.

Not one of them.

Not stupid.

When it comes to Muskrat Falls, though, there was more than enough stupid to go around. Muskrat Falls actually made stupid in places where stupid didn't exist before. People bathed in it, drank it, and worshipped it. And they attacked anyone else who didn't join in the revelry.

It is true, as Frampton quotes the risk book, that in Muskrat Falls, the project's promoters violated "established
practices of good governance, transparency and participation in political and
administrative decision making." They did so simply because they saw "such practices as counterproductive to getting projects started." With Muskrat Falls, the government kept citizens "at a substantial distance from
megaproject decision-making."

The promoters did all that but not without active collusion on the part of a great many opinion leaders in the province. Some of the collusion was passive but a troubling amount of it, whether in the news media or from business groups and political parties was as active as active could be. Consider the reporters who ignored the opposition questions about the project - even as weak as they were - simply because they were asking questions about the project. The media attitude was the same as the line coming from government supporters: we'd heard it all, heard enough. Let's just get on with it. And the ones who weren't tired of doubting what they'd bought two years earlier were just confused, supposedly, by all the evidence that they were wrong.

"Megaprojects often come draped in a politics of mistrust," Frampton says, quoting the risk book authors. "People fear that the political inequality in access to decision-making
processes will lead to an unequal distribution of risks, burdens and benefits
from projects."

None of that really applies in this case in this province.The handful of people who did fear the "unequal distribution" of risks and burdens were the project's opponents at the outset. Their fears and their mistrust have been proven in spades.

But the people who mistrusted from the outset were also the ones most frequently dismissed or attacked by the project's considerable number of supporters. They were legion both inside and outside government and what they call "mistrust" now is likely something a little more painful to them and a lot deeper.